CTIA s Wireless Metrics Reports

Transcription

1 CTIA s Wireless Metrics Reports Bobby Franklin Executive Vice President CTIA-The Wireless Association April 30, 2009

2 Background on Semi-Annual Survey CTIA s survey began in January 1985 focusing on operational cellular companies. Expanded in the 1990s to include new Personal Communications Service and Enhanced Specialized Mobile Radio operators. A voluntary and confidential survey, it now captures results for companies serving 96% of all estimated wireless subscribers. Includes all Tier 1 operators, most Tier 2 operators, and a sampling of Tier 3 operators. Now also includes major MVNOs to provide broader snapshot of the prepaid service market. Results are used to inform policymakers and to produce benchmarking reports the comprehensive all-industry Wireless Industry Indices report and the special Tier 3 Operators report for responding companies. 2

3 Background on CTIA s Reports Providing a Review of Reported and Derived Wireless Metrics Subscribership (total, prepaid, gross adds, and retention) Revenues (total, roaming, and data and average bills) Investment (incremental investment) Employees (total, sales and other employees) Facilities (cell sites, base stations, switches) Traffic (MOUs, calls, SMS & MMS Message Volumes, Traffic Balance) The Indices report also includes comparisons of wireless and wireline metrics drawn from other sources e.g., the Bureau of Labor Statistics (BLS), FCC, and the National Center for Health Statistics (NCHS). 3

4 Year-end 2008 Survey Details At year-end 2008, more than 150 wireless companies served more than million subscribers in the U.S., a figure that grew almost 15 million between December 2007 and December Participating wireless companies reported serving million subscribers at year-end Non-responding companies (publicly-traded and privatelyowned) served 10.5 million subscribers at year-end million of the million total active subscriptions were prepaid or pay-as-you-go subscriptions. 4

5 270,333, ,395, ,040, ,896,198 Dec-08 Dec-07 Dec-06 Dec ,140,362 Dec-04 As of Dec. 2008, There Were More Than Million Wireless Subscribers in the U.S. 300,000, ,000, ,721, ,766, ,374, ,478,031 86,047,003 69,209,321 55,312,293 44,042,992 33,758,661 24,134,421 16,009,461 11,032,753 7,557,148 5,283,055 3,508,944 2,069,441 1,230, , , ,000, ,000, ,000,000 50,000,000 0 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95 Dec-94 Dec-93 Dec-92 Dec-91 Dec-90 Dec-89 Dec-88 Dec-87 Dec-86 Dec-85 Source: CTIA Semi-Annual Survey

6 30,000,000 25,000,000 20,000,000 Annual Net Adds 15,000,000 10,000,000 5,000, Total Subscribership is Up, Derived Net Adds Are Down Wireless Subscriber Growth, ,938,282 22,354,818 25,144,583 25,755,836 23,418,381 23,431, ,000, ,000, ,333, ,395, ,040, ,896, ,140,362 17,955, ,721,981 12,392, ,766,842 18,896, ,374, ,478,031 16,837,682 86,047,003 13,897,028 69,209,321 11,269,301 55,312,293 10,284,331 44,042,992 9,624,240 33,758,661 8,124,960 24,134,421 4,976,708 16,009,461 11,032,753 3,475,605 7,557, ,000, ,000, ,000,000 50,000,000 0 Ending Subscribers Ending Subscribers Annual Changes

7 Background on Revenue Metrics ARPU, the Average Local Monthly Bill and Data CTIA has tracked the average local monthly bill since the late 1980s, and now also calculates ARPU based on differing definitions and components (e.g., including or excluding toll revenues, including or excluding roaming revenues), recognizing different methods may be used by individual carriers. The average local monthly bill remains a standard benchmark across carriers. The percentage that wireless data composes of the average bill or ARPU is also calculated (23% in the last half of 2008). CTIA does NOT track price or cost information. CTIA strictly follows the antitrust guidelines for trade association-sponsored surveys. 7

8 CTIA s Average Local Monthly Bill 8 $98.02 $89.30 $100 $90 $56.21 $68.68 $61.49 $80.90 $72.74 $80 $70 $60 $50.07 $49.79 $50.56 $49.98 $50.64 $49.91 $48.40 $47.37 $45.27 $41.24 $39.43 $47.70 $42.78 $51.00 $50 $40 $30 $20 $10 $0 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95 Dec-94 Dec-93 Dec-92 Dec-91 Dec-90 Dec-89 Dec-88 The Average Local Monthly Bill is Up 0.6 Percent Year-over-Year Source: CTIA Semi-Annual Survey

9 23.3% 76.7% Dec % 15.5% 13.5% 82.1% 84.5% 86.5% Wireless Data as a Percentage of Monthly Subscriber ARPU 20.3% 10.7% 8.3% 6.8% 4.8% 4.1% 2.5% 1.7% 1.2% 1.1% 0.9% 0.6% 0.4% 0.4% 0.2% 0.1% 100% 90% 80% 70% 60% 79.7% Dec-07 Jun-07 Dec-06 ARPU is Increasingly Composed of Wireless Data 89.3% 91.7% 93.2% 95.2% 95.9% 97.5% 98.3% 98.8% 98.9% 99.1% 99.4% 99.6% 99.6% 99.8% 99.9% 50% 40% 30% 20% 10% 0% Jun-08 Jun-06 Dec-05 Jun-05 Dec-04 Jun-04 Dec-03 Jun-03 Dec-02 Jun-02 Dec-01 Jun-01 Dec-00 Jun-00 Dec-99 Jun-99 Non-Data ARPU Data ARPU Source: CTIA Semi-Annual Survey

10 Users Generate Billions in Wireless Service Revenues $75,355,406 $72,728,764 $70,981,636 $67,887,668 $65,006,156 $60,450,669 $57,849,013 $55,689,208 $52,845,539 $49,275,671 $46,239,922 $41,384,171 $39,801,101 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 Six-Month Data Revenues Grow 38% Year-Over-Year in Thousands $493,250 $17,536,852 $14,784,297 $12,696,252 $10,532,277 $8,756,174 $6,460,560 $4,791,204 $3,790,579 $2,559,441 $2,041,090 $1,158,300 $699,764 $30,000,000 $20,000,000 $10,000,000 $0 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Total Wireless Industry Revenues Data Service Revenues 10 Source: CTIA Semi-Annual Survey

11 Most Reported Wireless Revenue Growth is in Data $160,000,000 $32,321,149 $140,000,000 $23,228,529 $15,216,735 $120,000,000 $8,581,783 $100,000,000 $4,600,531 in Thousands $80,000,000 $60,000,000 $40,000,000 $904,704 $75,603,482 $1,858,064 $85,766,029 $97,520,679 $104,956,438 $110,240,090 $115,640,775 $115,763,021 $20,000,000 $ Total Annual Revenues - Excluding Data W ire le ss Da ta Re venue s 11 Source: CTIA Semi-Annual Survey

12 $160,000,000 $140,000,000 $120,000,000 Revenues in Thousands $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 12 While a Shrinking Percentage is Roaming Revenue 12.0% $3,739,274 $3,742, % 10.2% 10.0% $3,494,294 $3,786,331 $4,210,331 $3,766,267 $3,895, % 6.4% 8.0% 4.1% 3.3% 2.8% 5.1% 4.3% 2.7% 2.5% 6.0% $3,936, % $3,882,981 $4,085,417 $3,500,469 Roaming as a % of Total Revenues $144,344,896 $135,127,290 $121,962,531 $109,751,890 $97,910,879 $83,857,826 $72,612,675 $57,994,373 $48,583,039 $35,933,072 $29,632, % 0.0% Non-Roaming Revenues Annual Roaming Revenues Roaming as a % of Total Revenues Source: CTIA Semi-Annual Survey

13 Background on Investment Comparative Reported Capex and Derived Ratios CTIA originally tracked cumulative capital investment in operational systems (including network and non-network investment e.g., office plant, vehicles, etc.) CTIA now tracks incremental investment in these systems (at all times excluding the cost of spectrum) CTIA does not track opex, nor does it track EBITDA. The revenue and capex figures CTIA tracks can be used with other data to derive a number of operational metrics or ratios: Incremental capex to revenues Incremental capex per ending subscriber (or incremental sub) Total / local revenue per ending subscriber Subscribers per employee Total revenue per employee Other employees to sales employees 13

14 Incremental Investment Total reported incremental investment for 2008 amounted to $20.1 billion, down slightly from In 2007, wireless carriers reported investing more than $21 billion in their operational networks (not including investments in pre-operational 3G and 4G systems). Responding wireless licensees together invested an average of $24.5 billion a year in their networks from 2001 to New Incremental data can be summed with previously-reported cumulative data to reach a new cumulative capex figure. 14

15 Reported Incremental Capex in Operational Systems $30,000 $25,000 $25,232 $24,424 $21,142 $20,000 $20,169 Millions $15,000 $10,000 $5,000 $ Source: CTIA Semi-Annual Survey Reported Incremental Capex 15

16 Total Annual Wireless Capex Wireless Carrier Capital Expenditures for Structures and Equipment $30,000 $27,283 $27,894 $25,000 $25,263 $24,007 $22,997 $20,972 $23,963 $22,187 $20,000 Millions $15,000 $14,376 $10,000 $8,222 $5,000 $ Source: U.S. Census Annual Census of Expenditures 16

17 $264,760,517 $244,591,206 $223,449,194 $199,025,327 Dec-08 Dec-07 Dec-06 Dec Derived Cumulative Wireless Investment Cumulative Wireless CapEx Reached More Than $264 Billion at Year-End 2008 $300,000,000 $250,000,000 $173,793,507 $145,866,914 $126,922,347 $105,030,101 $89,624,387 $71,264,865 $60,542,774 $46,057,910 $32,573,522 $24,080,467 $18,938,678 $13,956,366 $11,262,070 $8,671,544 $6,281,596 $4,480,142 $3,274,105 $2,234,635 $1,436,753 $911,167 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Thousands Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95 Dec-94 Dec-93 Dec-92 Dec-91 Dec-90 Dec-89 Dec-88 Dec-87 Dec-86 Dec-85 Source: CTIA Semi-Annual Survey

18 Background on Facility Metrics Cell Sites, Base Stations and Switches CTIA s survey asks for cell sites, base stations, and switches; it does not ask for other facilities (e.g., backhaul, power supply, or towers ). CTIA s survey does not distinguish between technology types (CDMA, GSM, HSPA, iden) or generations of technology. CTIA s survey does not include a collocation offset. CTIA requests aggregate data about operational units only not pre-operational facilities. Ratios can be derived for: Subscribers per cell site Capex per cell site Base stations per cell site Cell sites per switch 18

19 The Number of Operational Cell Sites 250, , , , , , , , , , , , , , ,000 81, ,288 75,000 65,887 50,000 51,600 25,000 10,307 12,824 17,920 22,663 30,045 0 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95 Dec-94 Dec-93 Dec-92 Cell Sites in Service are Up 13.5 Percent Year-over-Year 19 Source: CTIA Semi-Annual Survey

20 Direct Carrier Employees 300, , , , , , , , , , , , , , , ,387 84, ,000 68,165 53,902 39,810 34,348 26,327 21,382 15,927 50,000 11,400 7,147 4,334 2,727 0 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95 Dec-94 Dec-93 Dec-92 Dec-91 Dec-90 Dec-89 Dec-88 Dec-87 Dec-86 Dec-85 Direct Wireless Carrier Employment Grows 0.7% Year-over-Year 20 Direct Employment Exceeds 268,000 at Year-End 2008 Source: CTIA Semi-Annual Survey

21 Background on Traffic Metrics MOUs, Calls and Messages Since 1991, the survey has tracked billable MOUs and calls. This has allowed calculation of average length of calls (local, roaming, and more recently prepaid) and average monthly MOU volumes per subscriber over time. More recently, traffic balance information has been requested (wireless-to-landline, landline-to-wireless, wireless-to-wireless). MMS and SMS / Text message volumes are now requested in the wireless data supplement to the traditional survey. Data can be presented in six-month and annual increments, or attributed to an average monthly level. 21

22 In 2008 Wireless Consumers Used 2.2 Trillion Minutes 2,200 2,000 1,800 1,600 1,400 Billions 1,200 1, Source: CTIA Semi-Annual Survey

23 And Billions of Text and MMS Messages, and More Minutes and Messages as a Measure of Wireless Usage 3,500 3,000 These measures don't even include the traffic generated by millions of wireless users browsing the web, downloading music and games, or accessing other content with their wireless devices. 15 Billions of MOUs / Messages 2,500 2,000 1,500 1, , ,798 1, ,119 2, Source: CTIA Semi-Annual Survey MOUs Text Messages MMS Messages 23

24 Average Monthly Minutes per Subscriber Trended Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Source: CTIA Semi-Annual Survey Average Monthly Usage of Voice Minutes 24

25 Average Monthly Minutes and Text Messages Per Subscriber Trended Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Source: CTIA Semi-Annual Survey Average Monthly Usage of Voice Minutes Average Monthly Text Messages 25

26 Another Way of Looking at Combined Average Messages per Subscriber per Month (MOUs and Texts) 1,250 1,125 1, Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Average Monthly Usage of Voice Minutes Average Monthly Text Messages Source: CTIA Semi-Annual Survey 26

27 Background on Wireless-Wireline Comparisons The Indices report includes data on the wireline industry drawn from multiple reports, including FCC, Universal Service Administrative Company (USAC), and Bureau of Labor Statistics (BLS) data on: Number of ILEC access lines (end user and special access) Number of CLEC lines ILEC revenues Index trends The report draws upon multiple sources to provide the supplemental information to help put the wireless industry s performance into context. 27

28 National Wireless, ILEC and CLEC Subscriber Trends Through December ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 86,047,003 8,194, ,478,031 14,871, ,140, ,721, ,766, ,374,512 19,653,441 24,863,691 29,775,438 32,880, ,896,198 31,387, ,040,781 28,625, ,395,599 28,716, ,000, ,000,000 50,000, ,871, ,434, ,804, ,500, ,401, ,930, ,733, ,946, ,022,719 0 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 USAC ILEC Line Counts CLECs Wireless 28 Sources: CTIA Semi-Annual Survey, FCC Local Competition Report, USAC FCC Filings

29 National Data Shows Competitive Markets Associated with Most Dramatic Price Index Declines (Consumer Price Index Category Titles per Bureau of Labor Statistics) Jun-08 Mar-08 Dec-07 Sep-07 Jun-07 Mar-07 Dec-06 Sep-06 Jun-06 Mar-06 Dec-05 Sep-05 Jun-05 Mar-05 Dec-04 Sep-04 Jun-04 Mar-04 Dec-03 Sep-03 Jun-03 Mar-03 Dec-02 Sep-02 Jun-02 Mar-02 Dec-01 Sep-01 Jun-01 Mar-01 Dec-00 Sep-00 Jun-00 Mar-00 Dec-99 Sep-99 Jun-99 Mar-99 Dec-98 Sep-98 Jun-98 Mar-98 Dec-97 Telephone services Local Telephone Service Long Distance Charges Cellular Telephone Services Interstate Toll Service Intrastate Toll Service 29 Source: Bureau of Labor Statistics

30 Comparative Household Telecom Expenditures Source: FCC Trends in Telephone Service report, Aug

31 Wireless-Only Households in the U.S. 20.0% 18.0% 17.5% 16.0% 15.8% 14.0% 12.8% 13.6% 12.0% 10.5% 10.0% 8.4% 8.0% 7.3% 6.0% 5.0% 6.1% 4.0% 2.0% 0.0% Jan - June 2004 July - Dec Jan - June 2005 July - Dec Jan - June 2006 July - Dec Jan - June 2007 July - Dec Jan - June 2008 Source: National Center for Health Statistics (NCHS) January-June 2008 National Health Interview Survey 31

32 Wireless-Only Households Across the States 32 Source: NCHS, Wireless Substitution: State-level Estimates From the National Health Interview Survey, January December 2007

33 Wireless-Only Adults In Urban and Non-Urban Areas 20 Percentage of Adults with Only Wireless Telephones: Metropolitan and Non-Metropolitan Areas Percentage Wireless-Only Jan - June 2003 July - Dec 2003 Jan - June 2004 July - Dec 2004 Jan - June 2005 July - Dec 2005 Jan - June 2006 July - Dec 2006 Jan - June 2007 July - Dec 2007 Jan. - June 2008 Metropolitan Not Metropolitan Source: NCHS, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, Jan. June

34 76 % of Households Have Wireless Today 120.0% 100.0% 13.2% 13.8% 10.3% 10.2% 1.7% 1.3% 0.9% 1.9% 2.2% 2.5% 80.0% 1.9% 1.9% 2.0% 2.2% 23.8% 21.8% 20.6% 30.9% 29.6% 34.4% 32.4% 60.0% 40.0% 58.9% 58.8% 58.5% 42.4% 42.6% 45.6% 44.3% 20.0% 0.0% 7.3% 8.4% 10.5% 12.8% 13.6% 15.8% 17.5% Jan - June 2005 July - Dec Jan - June 2006 July - Dec Jan - June 2007 July - Dec Jan - June 2008 Wireless-Only Households Landline Households without a Wireless Phone Landline Households with Unknown Wireless Status Landline Households with a Wireless Phone Phoneless Households 34 Source: NCHS, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, Jan. June 2008

35 A Taste of Additional Metrics CTIA s reports provide the facts and the context for understanding the state of the wireless industry, and the basis for benchmarks of wireless performance. These benchmarks include such additional metrics and ratios as the following all-industry figures: Six-Month Capex as a % of Revenues: 14.0 % as of 2H2008 Six-Month Revenues per Employee: $280,623 as of 2H2008 Subscribers per Employee: 967 to 1 as of 2H2008 Subscribers per Cell Site: 1,073 to 1 as of 2H2008 Incremental Capex per Ending Subscriber: $40.71 as of 2H2008 These and similar metrics and ratios appear in the Tier 3 operators report. 35

36 Thank you. Questions?